topic Re: How many hard inquiries in the span of a year? in General Credit Topics

How many hard inquiries in the span of a year?

Anonymous — Mon, 17 Aug 2020 06:15:19 GMT

Hi all,

My wife and I are planning three large purchases between now and next summer, but not necessarily co-signing all of them.

First, my wife will be leasing a car via BMW FS. Her FICO 8 is 703 so I might co-sign that if it's not sufficient. My score is currently 780 but is usually 800+. I do have a personal loan though. I already have a single hard pull on my CR from applying for the amazon credit card a few months ago.

Next spring we'll be applying for a mortgage together, and then next July my lease is up on my car so I'll be applying for either another lease or a car loan.

Worst case for me in this case is 4 hard pulls in the course of one year. Would it be wise to not co-sign the lease on my wife's car to save the pulls for the mortgage and auto loan next year?

Thanks!

Re: How many hard inquiries in the span of a year?

CreditInspired — Mon, 17 Aug 2020 21:21:05 GMT

Hi and welcome to myFICO

Let's break it down. Your plan is to apply for a mortgage in April 2020--in ~8 months. The concern really should be the DTI, not the 4 HPs. A carnote has a huge impact on DTI.

Also, it's best to not apply for any new credit 12 mos prior to mortgage application.

Since both you and DW will be on the mortgage, please note it's her middle score that will be used--not yours. So under those circumstances, she shouldn't be applying for anything that would lower her scores. And you really should know what both of your mortgage scores are, not bank scores. Since her FICO 8 is at 703, her mortgage score is more than likely lower. You want the best mortgage rate possible.

You didnt ask, but IMHO, I suggest between now and mortgage application, to work on whatever is suppressing her scores in order to increase them to put you both in a better position creditwise.

GL2U

Re: How many hard inquiries in the span of a year?

sarge12 — Mon, 17 Aug 2020 08:42:10 GMT

@CreditInspired wrote:
Hi and welcome to myFICO

Let's break it down. Your plan is to apply for a mortgage in April 2020--in ~8 months. The concern really should be the DTI, not the 4 HPs. A carnote has a huge impact on DTI.

Also, it's best to not apply for any new credit 12 mos prior to mortgage application.

Since both you and DW will be on the mortgage, please note it's her middle score that will be used--not yours. So under those circumstances, she shouldn't be applying for anything that would lower her scores. And you really should know what both of your mortgage scores are, not bank scores. Since her FICO 8 is at 703, her mortgage score is more than likely lower. You want the best mortgage rate possible.

You didnt ask, but IMHO, I suggest
between now and mortgage application, to work on whatever is suppressing her scores in order to increase them to put you both in a better position creditwise.

GL2U

OK, just curious about this...why would the lender use her report in favor of his? Is it just the lowest of the 2 joint owners middle score? I can't believe that her gender would be why, and still be legal. Is her middle mortgage scores for certain lower than his just because her fico 08 is? At one time, my mortgage score was a good bit lower than my fico 08 due to how that fico score treated the American Honda Financial as a finance company. Fico 08 seems to treat any revolving debt less harshly as well. You seem quite certain it is her middle score that will be used, but why? This might explain a lot about the first mortgage I and my ex-wife got. My score was much higher than hers, but my DTI was too high to get it alone.

Re: How many hard inquiries in the span of a year?

Citylights18 — Mon, 17 Aug 2020 10:06:08 GMT

I'm not sure if a middle mortgage score of a co-applicant is a deal breaker or not but I think anybody who is preparing to buy should have their vehicles paid off just to free up more DTI space.

I know most people don't feel they have time to wait for that or for their credit scores to move up but it might be worthwhile taking an extra 6 months or a year to have all of that together.

Re: How many hard inquiries in the span of a year?

Jnbmom — Mon, 17 Aug 2020 10:37:29 GMT

@sarge12 wrote:
@CreditInspired wrote:
Hi and welcome to myFICO

Let's break it down. Your plan is to apply for a mortgage in April 2020--in ~8 months. The concern really should be the DTI, not the 4 HPs. A carnote has a huge impact on DTI.

Also, it's best to not apply for any new credit 12 mos prior to mortgage application.

Since both you and DW will be on the mortgage, please note it's her middle score that will be used--not yours. So under those circumstances, she shouldn't be applying for anything that would lower her scores. And you really should know what both of your mortgage scores are, not bank scores. Since her FICO 8 is at 703, her mortgage score is more than likely lower. You want the best mortgage rate possible.

You didnt ask, but IMHO, I suggest
between now and mortgage application, to work on whatever is suppressing her scores in order to increase them to put you both in a better position creditwise.

GL2U
OK, just curious about this...why would the lender use her report in favor of his? Is it just the lowest of the 2 joint owners middle score? I can't believe that her gender would be why, and still be legal. Is her middle mortgage scores for certain lower than his just because her fico 08 is? At one time, my mortgage score was a good bit lower than my fico 08 due to how that fico score treated the American Honda Financial as a finance company. Fico 08 seems to treat any revolving debt less harshly as well. You seem quite certain it is her middle score that will be used, but why? This might explain a lot about the first mortgage I and my ex-wife got. My score was much higher than hers, but my DTI was too high to get it alone.

As far as I know they use the lowest middle score , so if the wife's is lower they will use that and vice versa.

Re: How many hard inquiries in the span of a year?

ccquest — Mon, 17 Aug 2020 12:57:37 GMT

@sarge12 wrote:
OK, just curious about this...why would the lender use her report in favor of his? Is it just the lowest of the 2 joint owners middle score? I can't believe that her gender would be why, and still be legal. Is her middle mortgage scores for certain lower than his just because her fico 08 is? At one time, my mortgage score was a good bit lower than my fico 08 due to how that fico score treated the American Honda Financial as a finance company. Fico 08 seems to treat any revolving debt less harshly as well. You seem quite certain it is her middle score that will be used, but why? This might explain a lot about the first mortgage I and my ex-wife got. My score was much higher than hers, but my DTI was too high to get it alone.

Quicken Loans says the same thing if that is a better source for you:

Minimum Credit Score Needed: You’ll need a minimum credit score of 580 to qualify for an FHA loan that requires a down payment of just 3.5%. There is no minimum FICO® Score, though, to qualify for an FHA loan that requires a down payment of 10% or more.

However, FHA loans are originated by private lenders, and these lenders will usually have their own minimum credit score requirements. For instance, the minimum FICO® Score for an FHA loan through Quicken Loans is 580.

For a standard FHA loan, a minimum of one credit score is required to qualify. If your lender obtains all three of your credit scores, it will use the middle score for consideration. If you apply for a mortgage with your spouse, lenders will use the lower of the two middle credit scores.

Re: How many hard inquiries in the span of a year?

ldkcivilservant — Mon, 17 Aug 2020 15:30:29 GMT

CreditInspired made an assumption. More than likely a correct one.

The OP stated that their spouses score was 702, and his is around 780. Everything else being equal, you can pretty much assume that his mortgage scores are higher than hers.

Which is why CI said her middle score. Nothing sexist in that.

Re: How many hard inquiries in the span of a year?

Anonymous — Mon, 17 Aug 2020 18:53:02 GMT

Thanks for the replies! Hers is a little suppressed right now for two reasons:

First is there was apparently a 90 day late 5 years ago on one of her med school loans she wasn't aware of. We looked at her payment history and it looks like she made a normal payment in the month that the credit report is saying she has a 90 day late so we're disputing that.

Second is probably just the fact that she has med school debt. About $350k I think.

Combined we make about 500k per year. She currently has no car payment but has a 12k personal loan, and zero revolving debt. I have a 30k personal loan, zero revolving debt, a car lease, and about 35k in student loans. Not sure if that helps fill out the DTI picture.

Overall, it looks like our total minimum obligations would work out to about $8k, which is well below 43% for DTI, right?

Re: How many hard inquiries in the span of a year?

ccquest — Mon, 17 Aug 2020 19:08:40 GMT

@Anonymous wrote:

Second is probably just the fact that she has med school debt. About $350k I think.

Combined we make about 500k per year. She currently has no car payment but has a 12k personal loan, and zero revolving debt. I have a 30k personal loan, zero revolving debt, a car lease, and about 35k in student loans. Not sure if that helps fill out the DTI picture.

Doubt it's the student loans. I have 130k and my scores were in the 800s before my CC app spree and new student loan refi. Mostly due to the late payment I'm sure.

And of course you can both play the AZEO card when you get closer to your prequal/mortgage application so things are as high as possible then.

Re: How many hard inquiries in the span of a year?

Anonymous — Mon, 17 Aug 2020 20:32:02 GMT

Since you're only 8 months out from a possible Mortgage, i think the wiser choice would to be to wait on the new car and put that payment towards her Loan. Plenty of time after the house purchase to buy cars, and it's better to get the best rate on the Mortgage versus the auto.

As for having that 90 day late removed that will held alot, so good luck on that!

Re: How many hard inquiries in the span of a year?

CreditInspired — Mon, 17 Aug 2020 21:22:35 GMT

@sarge12 wrote:
@CreditInspired wrote:
Hi and welcome to myFICO

Let's break it down. Your plan is to apply for a mortgage in April 2020--in ~8 months. The concern really should be the DTI, not the 4 HPs. A carnote has a huge impact on DTI.

Also, it's best to not apply for any new credit 12 mos prior to mortgage application.

Since both you and DW will be on the mortgage, please note it's her middle score that will be used--not yours. So under those circumstances, she shouldn't be applying for anything that would lower her scores. And you really should know what both of your mortgage scores are, not bank scores. Since her FICO 8 is at 703, her mortgage score is more than likely lower. You want the best mortgage rate possible.

You didnt ask, but IMHO, I suggest
between now and mortgage application, to work on whatever is suppressing her scores in order to increase them to put you both in a better position creditwise.

GL2U
OK, just curious about this...why would the lender use her report in favor of his? Is it just the lowest of the 2 joint owners middle score? I can't believe that her gender would be why, and still be legal. Is her middle mortgage scores for certain lower than his just because her fico 08 is? At one time, my mortgage score was a good bit lower than my fico 08 due to how that fico score treated the American Honda Financial as a finance company. Fico 08 seems to treat any revolving debt less harshly as well. You seem quite certain it is her middle score that will be used, but why? This might explain a lot about the first mortgage I and my ex-wife got. My score was much higher than hers, but my DTI was too high to get it alone.

Yes, it's the lowest middle score--has nothing to do with gender.

Re: How many hard inquiries in the span of a year?

CreditInspired — Mon, 17 Aug 2020 21:37:47 GMT

@ldkcivilservant wrote:
CreditInspired made an assumption. More than likely a correct one.

The OP stated that their spouses score was 702, and his is around 780. Everything else being equal, you can pretty much assume that his mortgage scores are higher than hers.

Which is why CI said her middle score. Nothing sexist in that.

This exactly. Thanks idkcivilservant

Re: How many hard inquiries in the span of a year?

sarge12 — Tue, 18 Aug 2020 04:51:13 GMT

@CreditInspired wrote:
@ldkcivilservant wrote:
CreditInspired made an assumption. More than likely a correct one.

The OP stated that their spouses score was 702, and his is around 780. Everything else being equal, you can pretty much assume that his mortgage scores are higher than hers.

Which is why CI said her middle score. Nothing sexist in that.
This exactly. Thanks idkcivilservant

I thought that might be why, so I posed the question. That is why I said I did not think it could be the gender. I just honestly could not remember whos score was used on the only joint mortgage I ever had? It seems to me that it would be more fair to use an average of the two co-applicant parties middle scores. Can't say I am surprised they don't though. I don't see why it would be hard to add their 2 middle scores together and divide by 2. JMHO, but lenders often do not care about fairness in setting rates. It is more about profit. At the very least it should use the lowest score of the highest scoring borrower or the highest score of the lowest scoring applicant. All 3 of those would be more fair. As stated, it might be best to move every debt of hers possible to his credit. What is the point for his due diligence in gaining and maintaining very high scores if it will not save him a nickle in interest.

Re: How many hard inquiries in the span of a year?

Anonymous — Tue, 18 Aug 2020 05:18:44 GMT

I agree that it would be more prudent to wait. It's slightly complicated by the fact that we're also expecting a baby in March and currently only have one car which my wife has been driving to work. Granted, I'll be working from home for a while but my car isn't ideal for a baby and all its accoutrements.

If anybody had to guess what the difference in interest rate would be between getting the car before the mortgage, what would that be? I'll also note that we might only be in the house for 5 years as we look for better schools in the area once the kid approaches school age.

Thanks!

Re: How many hard inquiries in the span of a year?

sarge12 — Tue, 18 Aug 2020 06:11:40 GMT

@ccquest wrote:
@sarge12 wrote:
OK, just curious about this...why would the lender use her report in favor of his? Is it just the lowest of the 2 joint owners middle score? I can't believe that her gender would be why, and still be legal. Is her middle mortgage scores for certain lower than his just because her fico 08 is? At one time, my mortgage score was a good bit lower than my fico 08 due to how that fico score treated the American Honda Financial as a finance company. Fico 08 seems to treat any revolving debt less harshly as well. You seem quite certain it is her middle score that will be used, but why? This might explain a lot about the first mortgage I and my ex-wife got. My score was much higher than hers, but my DTI was too high to get it alone.

Quicken Loans says the same thing if that is a better source for you:

Minimum Credit Score Needed: You’ll need a minimum credit score of 580 to qualify for an FHA loan that requires a down payment of just 3.5%. There is no minimum FICO® Score, though, to qualify for an FHA loan that requires a down payment of 10% or more.

However, FHA loans are originated by private lenders, and these lenders will usually have their own minimum credit score requirements. For instance, the minimum FICO® Score for an FHA loan through Quicken Loans is 580.

For a standard FHA loan, a minimum of one credit score is required to qualify. If your lender obtains all three of your credit scores, it will use the middle score for consideration. If you apply for a mortgage with your spouse, lenders will use the lower of the two middle credit scores.

What in the World led you to believe that I doubted what CreditInspired posted? I did not go to the link, because that is not a better source in my opinion. I have read many posts by Him, and have never known him to not be a trusted source. It was my lack of knowledge that prompted the question. I have no plans to ever buy another house, but I was unsure how that worked, and wanted to know if my thinking it was due to her lower scores was right. I hope nobody else thinks I might doubt his veracity of his post. That is for sure not the case at all. Why would I search the net for an answer, when both I and CreditInspired, a trusted source for facts, were already logged in here. It was answered in short order.

Re: How many hard inquiries in the span of a year?

sarge12 — Tue, 18 Aug 2020 06:35:48 GMT

@ldkcivilservant wrote:
CreditInspired made an assumption. More than likely a correct one.

The OP stated that their spouses score was 702, and his is around 780. Everything else being equal, you can pretty much assume that his mortgage scores are higher than hers.

Which is why CI said her middle score. Nothing sexist in that.

Very likely the right assumption with a 78 point difference in Fico 08 scores. Since the OP only posted fico 08 scores though, I wanted to make sure my assumptions that it was the lowest of the 2 co-applicants middle scores was correct. For all I know, the OP could have posted his the actual mortgage scores in another thread. I did not want to say that is the case to someone else based on my possible false assumption, that he was assuming her mortgage scores were also lower. At one point my mortgage scores were even more than 80 points lower. Other peoples postings make me think I worded it poorly. I certainly do not want @CreditInspired to think I in any way doubted the veracity of his facts. I just was making sure I was not mistaken in my thoughts on how he arrived at that.

Re: How many hard inquiries in the span of a year?

ccquest — Tue, 18 Aug 2020 09:57:00 GMT

@Anonymous wrote:
I agree that it would be more prudent to wait. It's slightly complicated by the fact that we're also expecting a baby in March and currently only have one car which my wife has been driving to work. Granted, I'll be working from home for a while but my car isn't ideal for a baby and all its accoutrements.

If anybody had to guess what the difference in interest rate would be between getting the car before the mortgage, what would that be? I'll also note that we might only be in the house for 5 years as we look for better schools in the area once the kid approaches school age.

Thanks!

I'd say guessing the interest rate would vary a lot based on lender and where your scores sit already. If you're on the cusp of one rating level, it might bump up .5-1% if you fall down from that level.

Re: How many hard inquiries in the span of a year?

CreditInspired — Tue, 18 Aug 2020 10:01:40 GMT

@sarge12 I'm a she 😂🤣😆

And believe me when I say, it never crossed my mind that you doubted my veracity and I also didn't get the sense that other posters thought that either. Sometimes when we type on these eenie weenie teeny phone keyboards and the words in our minds are running a mile a minute, it may not come out exactly the way we want.

All is good my friend.

Re: How many hard inquiries in the span of a year?

CreditInspired — Tue, 18 Aug 2020 10:40:22 GMT

@Anonymous wrote:
I agree that it would be more prudent to wait. It's slightly complicated by the fact that we're also expecting a baby in March and currently only have one car which my wife has been driving to work. Granted, I'll be working from home for a while but my car isn't ideal for a baby and all its accoutrements.

If anybody had to guess what the difference in interest rate would be between getting the car before the mortgage, what would that be? I'll also note that we might only be in the house for 5 years as we look for better schools in the area once the kid approaches school age.

Thanks!

We dont have enough DPs. So it's best to get your and her mortgage scores first. So for example, suppose your wife's middle mortgage score is 680, she purchases/leases a car, her score decreases due to an inquiry and a new debt. With an even lower score, the rates will be higher and there may be points and an origination fee.

Now with a combined $500K salary, it could be ok, but then what mortgage amount are you looking at? How much are you putting down? If your goal is to stay only 5 years, then a conventional 5/5 ARM may be best. There are so many factors. And since you're talking BMW, that's an added debt of ~500/mo.

I still say it's more prudent to purchase/lease the car after the house.

Re: How many hard inquiries in the span of a year?

sarge12 — Tue, 18 Aug 2020 12:51:41 GMT

@CreditInspired wrote:
@sarge12 I'm a she 😂🤣😆

And believe me when I say, it never crossed my mind that you doubted my veracity and I also didn't get the sense that other posters thought that either. Sometimes when we type on these eenie weenie teeny phone keyboards and the words in our minds are running a mile a minute, it may not come out exactly the way we want.

All is good my friend.

OK..it is good, and I hope I can remember next time you are a she, because I think you have told me that before. CreditInspired just could be either, but so could sarge12. I am a he though and unlike what some might think my username is not because I was military or police. I flew straight past private and corporal at birth. I am 62 and easily forget which someone is after they tell me. Not many here have user names that are likely to indicate gender, not that it matters until some idiot repeatedly refers to you as a he. In any case you have always appeared knowledgable. You take care as well.